Promsvyazbank Scraps $500M IPO

The St. Petersburg Times

Published: October 17, 2012 (Issue # 1731)

VEDOMOSTI Promsvyazbank is controlled by billionaire brothers Alexei and Dmitry Ananyev.

MOSCOW — Promsvyazbank abandoned a $500 million listing in London and Moscow late Monday due to weak investor demand for one of Russia’s biggest privately owned lenders.

It is the second time in four years that the bank, which is controlled by billionaire brothers Alexei and Dmitry Ananyev, has failed to see through IPO plans.

“We’re disappointed that we haven’t completed the transaction,” Promsvyazbank president Artyom Konstandian said in an e-mailed statement.

“We will review this decision when market conditions improve and investor valuation expectations are more in line with those of Promsvyazbank management and shareholders.”

Russia’s 10th-largest bank had timed its IPO announcement to ride the euphoric wave created by Sberbank’s successful $5.2 billion listing last month. Its failure indicates that the opportunities for raising capital on international markets for Russian companies may have been overstated.

Giant mobile operator MegaFon is eyeing a $4 billion London listing later this year.

About 20 percent of Promsvyazbank was offered to investors, with global depositary receipts valued at between $10 and $12, Vedomosti reported.

Management said that recent meetings with investors had created new options.

“Promsvyazbank has received interest from third parties outside the scope of a capital markets transaction that it would like to take time to consider,” the bank said in a statement.

And analysts said that it could yet be third time lucky for Promsvyazbank.

“It is a shame that another addition to the limited universe of Russian banking equities has been put off,” Sberbank CIB analysts said in a note to investors Tuesday.

“But this IPO perhaps comes a little bit too early in terms of persuading investors to buy into a turnaround story at an early stage of that process.”